RRJ Capital Enters Chinese Property Market

A Chinese woman looks at affordable housing models as she selects house type at a real estate office in Qingdao city, eastern China’s Shandong province, 12 September 2013.

European Pressphoto Agency

Private-equity firm RRJ Capital made its first property investment in China, pumping $50 million into CIFI Holdings (Group) Co. weeks after Chinese developers’ results showed continued recovery in the country’s real estate market.

Singapore- and Hong Kong-based RRJ said Thursday it will subscribe to approximately 257 million new shares in the Hong Kong-listed property developer at 1.52 Hong Kong dollars (20 U.S. cents) per share, or about 4.4% of CIFI’s existing issued shares. The proceeds will partly be used by CIFI to acquire new projects or develop land.

Some of China’s biggest names in property have signaled robust growth in sales this year, as Beijing seems to have held back on market-cooling measures to boost flagging economic growth.

Last week, China Vanke Co., the country’s largest developer by market value, said sales in September rose 29.3% from the same period a year earlier and 1.9% from August. Earlier this month, its peers Country Garden Holdings Co. and Sunac China Holdings Ltd. also posted better-than-expected housing sales.

Shares in Shanghai-based CIFI were up 2.1% in Hong Kong on Thursday morning, outperforming the Hang Seng Index’s 0.2% gain.

RRJ this week also co-invested in Singapore-listed water treatment company SIIC Environment Holdings Ltd. with sovereign-wealth fund China Investment Corp., a unit of Shanghai Industrial Holdings Ltd. SIIC is raising about 260.2 million Singapore dollars (US$209.3 million) from issuing new shares.

RRJ, which was founded in 2011 by former Goldman Sachs Group Inc. banker and founding partner of China-focused Hopu Investment Management Co. Richard Ong, raised $3.5 billion for its second pan-Asia fund this year.